Quarterly report pursuant to Section 13 or 15(d)

FINANCIAL INSTRUMENTS

v3.22.2
FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
FINANCIAL INSTRUMENTS
NOTE 6 — FINANCIAL INSTRUMENTS
Natural Gas Financial Instruments
During the fourth quarter of 2021, we began entering into natural gas financial futures contracts to economically hedge the commodity price exposure of a portion of our natural gas production. The Company’s open positions as of June 30, 2022, had notional volumes of 5.9 Bcf, with maturities extending through March 2023.
LNG Financial Instruments
During the three months ended December 31, 2021, we entered into LNG financial futures contracts to reduce our exposure to commodity price fluctuations, and to achieve more predictable cash flows relative to two LNG cargos that we were committed to purchase from and sell to unrelated third-party LNG merchants in the normal course of business in January and April 2022. As of June 30, 2022, there were no open LNG financial instrument positions.
The following table summarizes the effect of the Company’s financial futures contracts which are included within Other expense, net on the Condensed Consolidated Statements of Operations (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Natural gas financial futures contracts:
Realized loss $ 10,536  $ 548  $ 11,251  $ 1,202 
Unrealized gain (loss) 6,790  —  (8,311) — 
LNG financial futures contracts:
Realized gain —  —  3,532  — 
Unrealized loss —  —  5,161  — 
The following table presents the classification of the Company’s financial derivative assets and liabilities that are required to be measured at fair value on a recurring basis on the Company’s Condensed Consolidated Balance Sheets (in thousands):
June 30, 2022 December 31, 2021
Current assets:
LNG financial futures contracts —  $ 8,693 
Current liabilities:
Natural gas financial futures contracts $ 8,311  — 
The Company’s natural gas and LNG financial instruments are valued using quoted prices in active exchange markets as of the balance sheet date and are classified as Level 1 within the fair value hierarchy.